Stewart v. Ahrenfeldt

By the Court, Bronson, Ch. J. The plaintiff is right in his law, that the settlement of a suit, or the compromise of a doubtful claim, is a good consideration for a promise to pay money; and when an action is brought upon the promise, it is no answer to show, that the first suit could not have been maintained, or that the claim was not a valid one. When parties meet upon equal terms, and adjust their differences, both are concluded from any further litigation of the matter. One party is not at liberty to say, that the sum paid, or agreed to be paid, was too much; nor the other, that it was not enough. Any other rule would deny to parties the right to settle their claims and controversies as they may deem proper. But it must be understood that in making the compromise, the parties have dealt fairly with each other. Fraud vitiates every thing. If Parker, instead of the defendant, had made this arrangement with the plaintiff, he would have been bound by it; for he and the plaintiff would have met on equal terms. One knew as well as the other whether the whole, or any part of the debt had been paid. But it was not so with the defendant. He was not the principal in the note; but stood in the relation of a surety for Parker. And there is nothing in the case to show, that he had even heard of the payment; or that there was any such ground for a defence. If the plaintiff, with [191] the money in his pocket, allowed the defendant to act on the mistaken supposition that he was liable as endorser for the debt, he did not deal fairly with his adversary; and the settlement ought not to be held conclusive. I agree, that if the question of payment was a point in controversy between the parties; if the defendant knew that Parker claimed to have paid the note, while that fact was denied by the plaintiff, and still chose to give one hundred dollars, or any other sum, to settle the suit and have his endorsement cancelled, instead of taking the peril and incurring the expense of a trial, there is no good reason why he should not be holden to the bargain. Settlements of this kind are usually effected by mutual concessions—one party agreeing to take less than he claims, and the other to pay more than he admits to be due, for the sake of ending or preventing litigation. And if all has been fairly done, neither party is afterwards at liberty to disregard the agreement and re-open the controversy. But until it appears, that the defendant knew there was, or might be a question of payment in the case, I think he is at liberty to impeach the consideration of the new notes, by showing that the plaintiff had been paid before those notes were given. Judgment affirmed.